Speech to Senate - Burning native forest wood waste for electricity should not be included in renewable energy target

Senator RHIANNON(New South Wales) (22:05): The government is currently considering including the burning of native forest wood waste to generate electricity in the Large-scale Renewable Energy Target. The forestry industry is pushing hard for this to happen. It would be a massive win to gain the subsidy for clear felling and burning our native forests. Logging is a massive source of carbon pollution, so it is utterly perverse that the government is even considering creating the huge financial incentive for the forestry industry to log and burn native forests in the name of climate action.

The Climate Change Authority released its final report on the Renewable Energy Target late last year and recommended support for the use of native forest wood waste in biomass burners. Recommendation 28 of the final report calls on the federal government to investigate whether including native forest wood waste in the RET would increase logging in native forests. According to the recommendation, if no increase in the rate of logging of native forest is predicted then wood waste eligibility should be reinstated. It is plain to see that the Climate Change Authority has been lobbied heavily by the forestry industry with its self-interested claims that wood waste from forest logging used to generate electricity will displace forest fossil fuel based electricity generation and, as a result, reduce greenhouse gas emissions. The 2003 review of the mandatory renewable energy target received a range of conflicting submissions, and two options emerged: to remove wood waste from the scheme altogether, or to leave native forest wood waste in but separate it from plantation wood waste sources so that the value of renewable energy certificates from plantation wood waste generation would not be impacted. The Howard government left native forest residues in the RET. Wood waste from native forests was eventually removed from the RET in 2011 following agreement of the Multi-Party Climate Change Committee. I acknowledge the huge amount of work that Senator Christine Milne did to remove native forest wood from the RET and to protect our forests.

A year ago, on 19 March 2012, during the House of Representatives debate following the passing of the clean energy future legislation, Independent MP Rob Oakeshott lodged a disallowance motion to reinstate native forest waste in the package. After the vote in the lower house was tied, the speaker used his casting vote to defeat the motion, which would have resulted in electricity users paying a subsidy to the timber industry to burn native forest residues for bioenergy. Mr Oakeshott claimed that his proposal would not result in one additional tree being felled because only forest waste would be eligible. This argument was naive, at best. The native forest industry's push for burning native forest biomass was driven by their desperate need to find a replacement market for woodchips or a cash flow to subsidise loss-making woodchips. Some optimists thought the demise of Mr Oakeshott's disallowance motion would finally convince the native-forest based timber industry to restructure rather than seek quick fixes to its long-term decline, but such predictions have proven to be premature.

On 11 December 2012, federal environment minister Tony Burke announced additional funding to help implement the Tasmanian Forests Intergovernmental Agreement. Part of this additional funding included $25 million to support regional structural adjustment and sustainable residue solutions, and to encourage innovation in the use of plantation timber. In this case, 'sustainable residue solutions'—as it was called—is code for a subsidy to help fund a new native forest biomass burner. Just over a week later, the Climate Change Authority's favourable recommendation to include the burning of native forest residues in the RET review gave further encouragement to the native forest industry's misguided strategy. The Climate Change Authority's reasoning was that if a forest would have been logged in any event then burning the wood waste in a power station is a better environmental outcome, in greenhouse gas emission terms, than burning the waste alone or allowing it to decompose. On the surface this seems plausible, but the logic is deeply flawed. The argument goes that if wood waste from logging native forests is used to generate electricity, then this will displace fossil-fuel based generation and, as a result, reduce greenhouse gas emissions. This logic is in keeping with the Climate Change Authority's goal to find a balance between promoting investments in renewable generation and containing the costs of the arrangements to electricity users. But this logic is faulty.

Andrew Macintosh, Associate Director of the ANU's Centre for Climate Law and Policy, and Richard Denniss, Executive Director of the Australia Institute, have both expertly argued their opposition to the eligibility for native forest wood waste under RET. They make four convincing arguments. First, the Climate Change Authority claims that the burning of native forest wood waste to generate electricity will bring about a reduction in greenhouse gas emissions. In the context of Australia's carbon pricing scheme, this claim is unsustainable. While Australia has a national emissions target, nothing that alters emissions within the sectors that count towards the existing emissions cap should have any impact on the national or global emissions outcome. All that a change within one participating sector will do is alter the distribution of emissions between participating sectors or countries. Even if, as the industry claims, the burning of native forest biomass did displace fossil-fuel based electricity generation, the purported reduction in total greenhouse emissions would not occur. Rather, it would simply result in more emissions coming from an alternative source.

Second, the proposition that giving native forest biomass furnaces access to RECs will result in an increase in the amount of renewable electricity generation is also unsustainable. The LRET sets a compulsory amount of renewable electricity that needs to be generated each year. Including native forest wood waste in the scheme would only result in the displacement of other forms of renewable electricity. In other words, an increase in electricity generation from native forest biomass would only diminish the electricity generated by other renewable sources such as wind, solar or hydro. So, contrary to what is being claimed, the burning of native forest biomass will fail to either displace fossil-fuel based electricity generation or boost renewable electricity generation. It would also conflict with the stated aim of the LRET to lower the cost of alternative technologies more rapidly than would normally occur in the absence of financial incentives. Biomass burning is an old technology and promoting it would be at the expense of sustainable technologies.

Third, it is futile for the government to commission a new study to test if logging native forests would increase if wood waste was an eligible fuel under the RET. The track record of the Tasmanian native forest industry sufficiently indicates that the inclusion of wood waste would almost inevitably lead to an increase in native forest logging.

Fourth, there is a potential reduction in Commonwealth revenues from the carbon pricing scheme. Both Macintosh and Denniss explore this problem. The Australian taxpayer could well be paying three times for the switch to native forest biomass electricity generation: first as a result of direct subsidies, second as a result of wood waste being included in the LRET and third as a result of lost carbon scheme revenues.

Expanding forest logging would increase greenhouse gas emissions from forest management, but due to the existence of the national emissions target, and the fact that forest management now counts towards this target, an increase in emissions from forest logging would not increase Australia's net greenhouse gas emissions.

However, the increase in harvest-related emissions would necessitate a relative reduction in the carbon pollution cap, which, in turn, would reduce carbon unit sales and Commonwealth carbon revenues. It is well known that factors contributing to the demise of Tasmania's native forest industry include the industry's marginal profitability arising from the high percentage of tree waste or 'harvest slash' left on the forest floor, the high Australian dollar, the decline in international woodchip prices and a shift away from native forest products by builders and consumers.

As Macintosh and Denniss point out:

Ironically though, the final nail in the industry’s coffin could come from the valuable carbon credits that could be generated by not harvesting native forests. While it has been spoken about for decades, the day has come where native forests are more valuable standing up than chopped down.

The government is required to respond to the Climate Change Authority's final report on the review of the renewable energy target by June 2013. It is clear that the proposal to allow native forest biomass burners to attract RECS under the large-scale renewable energy target needs to be rejected by this government.

The government must take action on climate change, but not at the expense of protections for our native forests. (Time expired)